HealthSouth Corp.'s Shelby plans could be impacted by board turnover

HealthSouth Corp. (NYSE: HLS) is taking another shot at getting state approval to build a $17 million rehabilitation hospital in Shelby County.

And experts say the timing may be right, now that the state’s new governor has repopulated the state health care decision-making board that turned down a key part of the project last year.

HealthSouth officials say they still have concerns of opposition to the proposal for a 34-bed rehabilitation hospital in the Pelham or Alabaster area.

However, the Birmingham-based inpatient rehabilitation provider came back to the State Health Coordinating Council this week with a renewed proposal that requests an adjustment to the number of rehabilitation beds to include 17 more beds in the State Health Plan for Shelby County instead of adding those beds for HealthSouth’s project specifically, as was previously requested and denied by the SHCC.

The other 17 beds would be transferred from the former Physicians Medical Center Carraway. HealthSouth filed a separate request for the transfer of those beds in 2009 with the Certificate of Need Review Board.

That request is still pending. It has been contested by nursing homes in Shelby and Jefferson counties along with Brookwood Medical Center. Brookwood officials did not respond to calls for comment regarding the revived HealthSouth hospital plan.

HealthSouth officials said the hospital would need the new request to the State Health Plan to be approved and its CON application to be approved for the hospital to move forward.

Clark Bruner, public information specialist with the State Health Planning Development Agency, the governing body of the CON and SHCC boards, said the attempt to dovetail these two requests is complex and unusual.

“It’s not unheard of, but I wouldn’t say it’s common,” he said. “There are a lot of smart people out there who know the system, but I think they have some very good people working on it and are going to do whatever is in the rules to get it done.”

Experts say the makeup of the CON and SHCC boards, which have experienced significant recent turnover, could play a role in the future of the HealthSouth project.

Of the nine CON board members appointed by Gov. Robert Bentley in his first three months of office, only one from the previous board remains. Of the 32 council members appointed, only three returned to serve again.

Jess Brown, Athens State University professor of government, said if the formerly proposed HealthSouth project that was voted down goes through on this attempt, it means the board has a different background and experience makeup and came to a different conclusion than a previous board – and HealthSouth played a political strategy well.

“When you have wholesale change on these boards and that’s what they’ve done here, you change the values and experiences brought to the table,” he said. “You start to see people looking at the facts and see the world through a different set of eyes and exercise their discretion of the law differently.”

Brown said undoubtedly, the boards will operate differently and will come to conclusions on hospital construction or state health issues in a different way.

“If you have a group of nine and you change out eight, there’s going to be a different operating culture for the group from the first meeting,” he said.

Some health care officials have criticized Bentley’s appointments to the influential boards because hospital administrators and nursing home leaders were not represented on the CON board and had less influence on the SHCC board.

That works in HealthSouth’s favor, considering those two groups opposed the CON request filed by HealthSouth in 2009.

A specific location for the hospital is unknown but is likely to be in the Alabaster or Pelham area of Shelby County. Requests for interviews with mayors in those towns were not returned by press time.

Linda Wilder, president of HealthSouth’s Southeast region, said the $17 million hospital will create up to 125 full- and part-time jobs in the future.

“We do expect some opposition from nursing homes in the area,” she said.

“It is two very different levels of care, however. We would be providing a hospital level of care.”

Wilder said the hospital is most needed because one of the area’s other rehabilitation facilities, Lakeshore Rehabilitative Hospital, is over capacity and there is need for care in fast-growing Shelby County.

“Lakeshore is running at capacity, and we’re turning patients away right now,” she said.

“Shelby County is one of the most populated counties in the state without access to hospital-level inpatient rehabilitation, and it’s a growing area, so access to inpatient rehabilitation will be more difficult as the area is more densely populated.”